5.

NSC vs CA into a contract of affreightment or contract of voyage charter

hire wherein the contract states that NSC hired VSI's vessel to
make one voyage to load steel products at Iligan City and
THIRD DIVISION
discharge them at North Harbor, Manila. Thereafter, in
accordance with the voyage charter hire, NSC's shipment of
[G.R. No. 112287. December 12, 1997.]
1,677 skids of tinplates and 92 packages of hot rolled sheets
were loaded to MV Vlasons I for carriage to Manila. The vessel
NATIONAL STEEL CORPORATION,  petitioner, vs.
arrived safely at North Harbor, Manila but upon opening the
COURT OF APPEALS AND VLASONS SHIPPING,
three hatches containing the shipment, nearly all the skids of
INC.,  respondents.
tinplates and hot rolled sheets were allegedly found to be wet
and rusty. On the basis of this incident, NSC filed a complaint
[G.R. No. 112350. December 12, 1997.] against VSI for damages due to the downgrading of the
damaged tinplates in the amount of P941,145.18. After trial on
VLASONS SHIPPING, INC.,  petitioner, vs. COURT the merits, the court a quo rendered judgment dismissing the
OF APPEALS and NATIONAL STEEL complaint and ordering NSC to pay VSI on the counterclaim
CORPORATION,  respondents. prayed for by the latter. NSC seasonably filed an appeal to the
Court of Appeals, but the said court just modified the appealed
Poblador, De los Reyes & Dacayo, Jr. for National Steel decision by reducing the award of demurrage and deleting the
Corp. award of attorney's fees and expenses of litigation. Both
parties filed their separate motions for reconsideration, but
De Rosario & Del Rosario for Vlasons Shipping, Inc.
the appellate court denied both motions. Hence, this petition.

The Supreme Court affirms the assailed decision of the

SYNOPSIS
Court of Appeals, except in respect with the demurrage. It is
undisputed that VSI did not offer its services to the general
The cases under consideration are two separate
public. As correctly concluded by the Court of Appeals, MV
petitions for review filed by National Steel Corporation (NSC)
Vlasons I was not a common but a private carrier. Verily, the
and Vlasons Shipping Inc. (VSI), both assailing the decision of
extent of VSI's responsibility and liability over NSC's cargo are
the Court of Appeals. The records of the case reveal that NSC
determined primarily by the stipulations in the contract of
hired MV Vlasons I, a private vessel owned by VSI. They entered
carriage or charter party and the Code of Commerce. In the
Page 1 of 24
instant case, the burden of proof lies on the part of NSC and common carrier is the carriage of passengers or goods,
not the VSI. Additionally, the Court ruled that the since the provided it has space, for all who opt to avail themselves of its
problems raised by NSC were all factual issues already transportation service for a fee. A carrier which does not
threshed out and decided by the trial court and subsequently qualify under the above test is deemed a private carrier.
affirmed by the Court of Appeals, the factual findings of both "Generally, private carriage is undertaken by special agreement
courts are binding on this Court. However, the Court disagrees and the carrier does not hold himself out to carry goods for the
with the findings of both courts to have found and affirmed general public. . . ."
respectively that NSC incurred eleven days of delay in
2. ID.; ID.; A CARRIER CARRYING PASSENGERS OR
unloading the cargo. In this case, the contract of voyage
GOODS ONLY FOR THOSE IT CHOSE UNDER A SPECIAL
charter hire provided four-day laytime; it also qualified laytime
CONTRACT OF CHARTER PARTY IS PRIVATE CARRIER; CASE AT
as WWDSHINC or weather working days Sundays and holidays
BAR. — It is undisputed that VSI did not offer its services to the
included. Consequently, NSC cannot be held liable for
general public. As found by the Regional Trial Court, it carried
demurrage as the four-day laytime allowed it did not lapse,
passengers or goods only for those it chose under a "special
having been tolled by unfavorable weather condition in view of
contract of charter party." As correctly concluded by the Court
WWDSHINC qualification agreed upon by the parties. In view
of Appeals, the MV Vlason I "was not a common but a private
thereof, the consolidated petitions are denied and the
carrier." Consequently, the rights and obligations of VSI and
questioned decision is affirmed with modification that the
NSC, including their respective liability for damage to the cargo,
award of demurrage awarded to VSI is deleted.
are determined primarily by stipulations in their contract of
private carriage or charter party.
SYLLABUS
3. ID.; ID.; IN A CONTRACT OF PRIVATE CARRIAGE, THE
BURDEN OF PROOF IN CASE OF ACCIDENT IS ON THE CARRIER.
1. CIVIL LAW; COMMON CARRIERS; THE TRUE TEST OF A — In view of the aforementioned contractual stipulations, NSC
COMMON CARRIER IS THE CARRIAGE OF PASSENGERS OR must prove that the damage to its shipment was caused by
GOODS, PROVIDED IT HAS SPACE, FOR ALL WHO OPT TO AVAIL VSI's willful negligence or failure to exercise due diligence in
THEMSELVES OF ITS TRANSPORTATION SERVICE FOR A FEE. — making MV Vlason I seaworthy and fit for holding, carrying and
Article 1732 of the Civil Code defines a common carrier as safekeeping the cargo. Ineluctably, the burden of proof was
"persons, corporations, firms or associations engaged in the placed on NSC by the parties' agreement. Because the MV
business of carrying or transporting passengers or goods or Vlason I was a private carrier, the shipowner's obligations are
both, by land, water or air, for compensation, offering their governed by the provisions of the Code of Commerce (Arts.
services to the public." It has been held that the true test of a
Page 2 of 24
361 & 362) and not by the Civil Code which, as a general rule Clearly, it was error for the trial court and the Court of Appeals
places the prima facie presumption of negligence on a to have found and affirmed respectively that NSC incurred
common carrier. In the instant case, the Court of Appeals eleven days of delay in unloading the cargo. The trial court
correctly found that NSC "has not taken the correct position in arrived at this erroneous finding by subtracting from the
relation to the question of who has the burden of proof. Thus twelve days, specifically August 13, 1974 to August 24, 1974,
in its brief, after citing Clause 10 and Clause 12 of the the only day of unloading unhampered by unfavorable
NANYOZAI Charter Party it argues that 'a careful examination weather or rain, which was August 22, 1974. Based on our
of the evidence will show that VSI miserably failed to comply previous discussion, such finding is a reversible error.
with any of these obligations' as if defendant-appellee [VSI] had
6. REMEDIAL LAW; CIVIL PROCEDURE; APPEAL TO THE
the burden of proof."
SUPREME COURT; WHERE THE FACTUAL FINDINGS OF BOTH
4. COMMERCIAL LAW; CARRIAGE OF GOODS BY THE TRIAL COURT AND THE COURT OF APPEALS COINCIDE,
SEA ACT; DEMURRAGE; DEFINED. — The Court defined THE SAME ARE BINDING ON THE COURT. — The questions of
demurrage in its strict sense as the compensation provided for fact were threshed out and decided by the trial court, which
in the contract of affreightment for the detention of the vessel had the firsthand opportunity to hear the parties' conflicting
beyond the laytime or that period of time agreed on for claims and to carefully weigh their respective evidence. The
loading and unloading of cargo. It is given to compensate the findings of the trial court were subsequently affirmed by the
shipowner for the nonuse of the vessel. Court of Appeals. Where the factual findings of both the trial
court and the Court of Appeals coincide, the same are binding
5. ID.; ID.; PETITIONER NSC, NOT LIABLE FOR
on this Court. We stress that, subject to some exceptional
DEMURRAGE, AS THE FOUR-DAY LAYTIME ALLOWED IN THE
instances, only questions of law — not questions of fact — may
CHARTER CONTRACT DID NOT LAPSE; CASE AT BAR. — The
be raised before this Court in a petition for review under Rule
contract of voyage charter hire provided for a four day laytime;
45 of the Rules of Court. After a thorough review of the case at
it also qualified laytime as WWDSHINC or weather working
bar, we find no reason to disturb the lower courts' factual
days Sundays and holidays included. The running of laytime
findings, as indeed NSC has not successfully proven the
was thus made subject to the weather, and would cease to run
application of any of the aforecited exceptions.
in the event unfavorable weather interfered with the unloading
of cargo. Consequently, NSC may not be held liable for 7. ID.; EVIDENCE; ADMISSIBILITY OF EVIDENCE; AN
demurrage as the four-day laytime allowed it did not lapse, ORIGINAL CERTIFICATE ISSUED BY AN OFFICER OF THE
having been tolled by unfavorable weather condition in view of PHILIPPINE COAST GUARD, IS ADMISSIBLE UNDER A WELL-
the WWDSHINC qualification agreed upon by the parties. SETTLED EXCEPTION TO THE HEARSAY RULE UNDER SECTION

Page 3 of 24
44, RULE 130 OF THE RULES OF COURT. — Exhibit 11 is the latter, as this is tantamount to imposing a premium on
admissible under a well-settled exception to the hearsay rule one's right to litigate or seek judicial redress of legitimate
per Section 44 of Rule 130 of the Rules of Courts which grievances.
provides that "(e)ntries in official records made in the
performance of a duty by a public officer of the Philippines, or
by a person in the performance of a duty especially enjoined DECISION
by law, are  prima facie  evidence of the facts therein stated."
Exhibit 11 is an original certificate of the Philippine Coast
Guard in Cebu issued by Lieutenant Junior Grade Noli C. Flores PANGANIBAN,  J  : p

to the effect that "the vessel 'VLASONS I was drydocked . . . and

The Court finds occasion to apply the rules on the
PCG Inspectors were sent on board for inspection. . . . After
seaworthiness of a  private  carrier, its owner's responsibility for
completion of drydocking and duly inspected by PCG
damage to the cargo and its liability for demurrage and
Inspectors, the vessel 'VLASONS I', a cargo vessel, is in
attorney's fees. The Court also reiterates the well-known rule
seaworthy condition, meets all requirements, fitted and
that findings of facts of trial courts, when affirmed by the Court
equipped for trading as a cargo vessel was cleared by the
of Appeals, are binding on this Court.  cdasia

Philippine Coast Guard and sailed for Cebu Port on July 10,
1974." NSC's claim, therefore, is obviously misleading and The Case
erroneous.
Before us are two separate petitions for review filed by
8. CIVIL LAW; DAMAGES; ATTORNEY'S FEES;
National Steel Corporation (NSC) and Vlasons Shipping, Inc.
RESPONDENT VSI NOT ENTITLED THERETO, IN THE ABSENCE
(VSI), both of which assail the August 12, 1993 Decision of the
OF BAD FAITH ON THE PART OF THE PETITIONER NSC. — VSI
Court of Appeals. 1 The Court of Appeals modified the decision
assigns as error of law the Court of Appeals' deletion of the
of the Regional Trial Court of Pasig, Metro Manila, Branch 163
award of attorney's fees. We disagree. While VSI was
in Civil Case No. 23317. The RTC disposed as follows:
compelled to litigate to protect its rights, such fact by itself will
not justify an award of attorney's fees under Article 2208 of "WHEREFORE, judgment is hereby rendered
the Civil Code when ". . . no sufficient showing of bad faith in favor of defendant and against the plaintiff
would be reflected in a party's persistence in a case other than dismissing the complaint with cost against plaintiff,
an erroneous conviction of the righteousness of his cause. . . ." and ordering plaintiff to pay the defendant on the
Moreover, attorney's fees may not be awarded to a party for counterclaim as follows:
the reason alone that the judgment rendered was favorable to
Page 4 of 24
 1. The sum of P75,000.00 as unpaid freight "(1) On July 17, 1974, plaintiff National Steel
and P88,000.00 as demurrage with interest at the Corporation (NSC) as Charterer and defendant
legal rate on both amounts from April 7, 1976 until Vlasons Shipping, Inc. (VSI) as Owner, entered into
the same shall have been fully paid; a Contract of Voyage Charter Hire (Exhibit 'B'; also
Exhibit '1') whereby NSC hired VSI's vessel, the MV
2. Attorney's fees and expenses of litigation
'VLASONS I' to make one (1) voyage to load steel
in the sum of P100,000.00; and
products at Iligan City and discharge them at North
3. Cost of suit. Harbor, Manila, under the following terms and
SO ORDERED." 2 conditions, viz:

On the other hand, the Court of Appeals ruled: '1. . . .

"WHEREFORE, premises considered, the 2. Cargo: Full cargo of steel products of not
decision appealed from is modified by reducing the less than 2,500 MT, 10% more or less
award for demurrage to P44,000.00 and deleting at Master's option.
the award for attorney's fees and expenses of
3. . . .
litigation. Except as thus modified, the decision is
AFFIRMED. There is no pronouncement as to costs. 4. Freight/Payment: P30.00/metric ton, FIOST
basis. Payment upon presentation of
SO ORDERED." 3
Bill of Lading within fifteen (15) days.

The Facts 5. Laydays/Cancelling: July 26, 1974/Aug. 5,

1974
The MV Vlasons I is a vessel which renders tramping
6. Loading/Discharging Rate: 750 tons per
service and, as such, does not transport cargo or shipment for
WWDSHINC. (Weather Working Day of
the general public. Its services are available only to specific
24 consecutive hours, Sundays and
persons who enter into a special contract of charter party with
Holidays Included).
its owner. It is undisputed that the ship is a private carrier. And
it is in this capacity that its owner, Vlasons Shipping, Inc., 7. Demurrage/Dispatch: P8,000.00/P4,000.00
entered into a contract of affreightment or contract of voyage per day.

charter hire with National Steel Corporation. 8. . . .

The facts as found by Respondent Court of Appeals are 9. Cargo Insurance: Charterer's and/or
as follows: Shipper's must insure the cargoes.
Page 5 of 24
 Shipowners not responsible for diligence on the part of the owners to make the
losses/damages except on proven vessel seaworthy, and to secure that the vessel is
willful negligence of the officers of the properly manned, equipped and supplied and to
vessel. make the holds and all other parts of the vessel in
which cargo is carried, fit and safe for its reception,
10. Other terms: (a) All terms/conditions
carriage and preservation; . . ; perils, dangers and
of NONYAZAI C/P [sic] or other
accidents of the sea or other navigable waters; . . ;
internationally recognized Charter
wastage in bulk or weight or any other loss or
Party Agreement shall form part of
damage arising from inherent defect, quality or
this Contract.
vice of the cargo; insufficiency of packing; . . .;
xxx xxx xxx' latent defects not discoverable by due diligence;
any other cause arising without the actual fault or
The terms 'F.I.O.S.T.' which is used in the
privity of Owners or without the fault of the agents
shipping business is a standard provision in the
or servants of owners.'
NANYOZAI Charter Party which stands for 'Freight
In and Out including Stevedoring and Trading', Paragraph 12 of said NANYOZAI Charter
which means that the handling, loading and Party also provides that '(o)wners shall not be
unloading of the cargoes are the responsibility of responsible for split, chafing and/or any damage
the Charterer. Under Paragraph 5 of the NANYOZAI unless caused by the negligence or default of the
Charter Party, it states, 'Charterers to load, stow master and crew.'
and discharge the cargo  free of risk and expenses to
(2) On August 6, 7 and 8, 1974, in
owners. . . .' (Emphasis supplied).
accordance with the Contract of Voyage Charter
Under paragraph 10 thereof, it is provided Hire, the MV 'VLASONS I' loaded at plaintiffs pier at
that '(o)wners shall, before and at the beginning of Iligan City, the NSC's shipment of 1,677 skids of
the voyage, exercise due diligence to make the tinplates and 92 packages of hot rolled sheets or a
vessel seaworthy and properly manned, equipped total of 1,769 packages with a total weight of about
and supplied and to make the holds and all other 2,481.19 metric tons for carriage to Manila. The
parts of the vessel in which cargo is carried, fit and shipment was placed in the three (3) hatches of the
safe for its reception, carriage and preservation. ship. Chief Mate Gonzalo Sabando, acting as agent
Owners shall not be liable for loss of or damage of of the vessel[,] acknowledged receipt of the cargo
the cargo arising or resulting from: on board and signed the corresponding bill of
unseaworthiness unless caused by want of due

Page 6 of 24
lading, B.L.P.P. No. 0233 (Exhibit 'D') on August 8, a consequence of the heavy weather and rough
1974. seas encountered while en route to destination
(Exhibit 'F'). It was also reported that MASCO's
(3) The vessel arrived with the cargo at Pier
surveyors drew at random samples of bad order
12, North Harbor, Manila, on August 12, 1974. The
packing materials of the tinplates and delivered the
following day, August 13, 1974, when the vessel's
same to the M.I.T. Testing Laboratories for analysis.
three (3) hatches containing the shipment were
On August 31, 1974, the M.I.T. Testing Laboratories
opened by plaintiff's agents, nearly all the skids of
issued Report No. 1770 (Exhibit 'I') which in part,
tinplates and hot rolled sheets were allegedly
states, 'The analysis of bad order samples of
found to be wet and rusty. The cargo was
packing materials . . . shows that wetting was
discharged and unloaded by stevedores hired by
caused by contact with SEA WATER'.
the Charterer. Unloading was completed only on
August 24, 1974 after incurring a delay of eleven (5) On September 6, 1974, on the basis of
(11) days due to the heavy rain which interrupted the aforesaid Report No. 1770, plaintiff filed with
the unloading operations. (Exhibit 'E') the defendant its claim for damages suffered due
to the downgrading of the damaged tinplates in the
(4) To determine the nature and extent of
amount of P941,145.18. Then on October 3, 1974,
the wetting and rusting, NSC called for a survey of
plaintiff formally demanded payment of said claim
the shipment by the Manila Adjusters and
but defendant VSI refused and failed to pay.
Surveyors Company (MASCO). In a letter to the NSC
Plaintiff filed its complaint against defendant on
dated March 17, 1975 (Exhibit 'G'), MASCO made a
April 21, 1976 which was docketed as Civil Case No.
report of its ocular inspection conducted on the
23317, CFI, Rizal.
cargo, both while it was still on board the vessel
and later at the NDC warehouse in Pureza St., Sta. (6) In its complaint, plaintiff claimed that it
Mesa, Manila where the cargo was taken and sustained losses in the aforesaid amount of
stored. MASCO reported that it found wetting and P941,145.18 as a result of the act, neglect and
rusting of the packages of hot rolled sheets and default of the master and crew in the management
metal covers of the tinplates; that tarpaulin hatch of the vessel as well as the want of due diligence on
covers were noted torn at various extents; that the part of the defendant to make the vessel
container/metal casings of the skids were rusting seaworthy and to make the holds and all other
all over. MASCO ventured the opinion that 'rusting parts of the vessel in which the cargo was carried,
of the tinplates was caused by contact with SEA fit and safe for its reception, carriage and
WATER sustained while still on board the vessel as preservation — all in violation of defendant's

Page 7 of 24
undertaking under their Contract of Voyage privity of defendant and without the fault of the
Charter Hire. agents or servants of defendant; consequently,
defendant is not liable; that the stevedores of
(7) In its answer, defendant denied liability
plaintiff who discharged the cargo in Manila were
for the alleged damage claiming that the MV
negligent and did not exercise due care in the
'VLASONS I' was seaworthy in all respects for the
discharge of the cargo; and that the cargo was
carriage of plaintiff's cargo; that said vessel was not
exposed to rain and seawater spray while on the
a 'common carrier' inasmuch as she was under
pier or in transit from the pier to plaintiff's
voyage charter contract with the plaintiff as
warehouse after discharge from the vessel; and
charterer under the charter party; that in the
that plaintiff's claim was highly speculative and
course of the voyage from Iligan City to Manila, the
grossly exaggerated and that the small stain marks
MV 'VLASONS I' encountered very rough seas,
or sweat marks on the edges of the tinplates were
strong winds and adverse weather condition,
magnified and considered total loss of the cargo.
causing strong winds and big waves to
Finally, defendant claimed that it had complied
continuously pound against the vessel and
with all its duties and obligations under the Voyage
seawater to overflow on its deck and hatch covers;
Charter Hire Contract and had no responsibility
that under the Contract of Voyage Charter Hire,
whatsoever to plaintiff. In turn, it alleged the
defendant shall not be responsible for
following counterclaim:
losses/damages except on proven willful
negligence of the officers of the vessel, that the (a) That despite the full and proper
officers of said MV 'VLASONS I' exercised due performance by defendant of its obligations
diligence and proper seamanship and were not under the Voyage Charter Hire Contract,
willfully negligent; that furthermore the Voyage plaintiff failed and refused to pay the agreed
Charter Party provides that loading and discharging charter hire of P75,000.00 despite demands
of the cargo was on FIOST terms which means that made by defendant;
the vessel was free of risk and expense in
(b) That under their Voyage Charter
connection with the loading and discharging of the
Hire Contract, plaintiff had agreed to pay
cargo; that the damage, if any, was due to the
defendant the sum of P8,000.00 per day for
inherent defect, quality or vice of the cargo or to
demurrage. The vessel was on demurrage for
the insufficient packing thereof or to latent defect
eleven (11) days in Manila waiting for plaintiff
of the cargo not discoverable by due diligence or to
to discharge its cargo from the vessel. Thus,
any other cause arising without the actual fault or
plaintiff was liable to pay defendant

Page 8 of 24
 demurrage in the total amount of (Exh. '12'); and Certificate of Approval for
P88,000.00.  cdasia Conversion issued by the Bureau of Customs
(Exh. '9'). That being a vessel engaged in both
(c) For filing a clearly unfounded civil
overseas and coastwise trade, the MV
action against defendant, plaintiff should be
'VLASONS I' has a higher degree of
ordered to pay defendant attorney's fees and
seaworthiness and safety.
all expenses of litigation in the amount of not
less than P100,000.00. (c) Before it proceeded to Iligan City to
perform the voyage called for by the Contract
(8) From the evidence presented by both
of Voyage Charter Hire, the MV 'VLASONS I'
parties, the trial court came out with the following
underwent drydocking in Cebu and was
findings which were set forth in its decision:
thoroughly inspected by the Philippine Coast
(a) The MV 'VLASONS I' is a vessel of Guard. In fact, subject voyage was the vessel's
Philippine registry engaged in the tramping first voyage after the drydocking. The
service and is available for hire only under evidence shows that the MV 'VLASONS I' was
special contracts of charter party as in this seaworthy and properly manned, equipped
particular case. and supplied when it undertook the voyage. It

(b) That for purposes of the voyage had all the required certificates of

covered by the Contract of Voyage Charter seaworthiness.

Hire (Exh. '1'), the MV 'VLASONS I' was (d) The cargo/shipment was securely
covered by the required seaworthiness stowed in three (3) hatches of the ship. The
certificates including the Certification of hatch openings were covered by hatchboards
Classification issued by an international which were in turn covered by two or double
classification society, the NIPPON KAIJI tarpaulins. The hatch covers were water tight.
KYOKAI (Exh. '4'); Coastwise License from the Furthermore, under the hatchboards were
Board of Transportation (Exh. '5'); steel beams to give support.
International Loadline Certificate from the
(e) The claim of the plaintiff that
Philippine Coast Guard (Exh. '6'); Cargo Ship
defendant violated the contract of carriage is
Safety Equipment Certificate also from the
not supported by evidence. The provisions of
Philippine Coast Guard (Exh. '7'); Ship Radio
the Civil Code on common carriers pursuant
Station License (Exh. '8'); Certificate of
to which there exists a presumption of
Inspection by the Philippine Coast Guard

Page 9 of 24
negligence in case of loss or damage to the them to resume work when the rains stopped
cargo are not applicable. As to the damage to by just removing the tent or canvas. Because
the tinplates which was allegedly due to the of this improper covering of the hatches by
wetting and rusting thereof, there is the stevedores during the discharging and
unrebutted testimony of witness Vicente unloading operations which were interrupted
Angliongto that tinplates 'sweat' by by rains, rainwater drifted into the cargo
themselves when packed even without being through the hatch openings. Pursuant to
in contract (sic) with water from outside paragraph 5 of the NANYOSAI [sic] Charter
especially when the weather is bad or raining. Party which was expressly made part of the
The rust caused by sweat or moisture on the Contract of Voyage Charter Hire, the loading,
tinplates may be considered as a loss or stowing and discharging of the cargo is the
damage but then, defendant cannot be held sole responsibility of the plaintiff charterer
liable for it pursuant to Article 1734 of the and defendant carrier has no liability for
Civil Case which exempts the carrier from whatever damage may occur or maybe [sic]
responsibility for loss or damage arising from caused to the cargo in the process.
the 'character of the goods . . .'. All the 1,769
(g) It was also established that the
skids of the tinplates could not have been
vessel encountered rough seas and bad
damaged by water as claimed by plaintiff. It
weather while en route from Iligan City to
was shown as claimed by plaintiff that the
Manila causing sea water to splash on the
tinplates themselves were wrapped in kraft
ship's deck on account of which the master of
paper lining and corrugated cardboards could
the vessel (Mr. Antonio C. Dumlao) filed a
not be affected by water from outside.
'Marine Protest' on August 13, 1974 (Exh. '15')
(f) The stevedores hired by the plaintiff which can be invoked by defendant as a  force
to discharge the cargo of tinplates were majeure  that would exempt the defendant
negligent in not closing the hatch openings of from liability.
the MV 'VLASONS I' when rains occurred
(h) Plaintiff did not comply with the
during the discharging of the cargo thus
requirement prescribed in paragraph 9 of the
allowing rainwater to enter the hatches. It
Voyage Charter Hire contract that it was to
was proven that the stevedores merely set up
insure the cargo because it did not. Had
temporary tents to cover the hatch openings
plaintiff complied with the requirement, then
in case of rain so that it would be easy for
it could have recovered its loss or damage
Page 10 of 24
 from the insurer. Plaintiff also violated the equipped and supplied, and that there is no proof of
charter party contract when it loaded not only willful negligence of the vessel's officers.
'steel products', i.e. steel bars, angular bars
"II
and the like but also tinplates and hot rolled
sheets which are high grade cargo The trial court erred in finding that the rusting
commanding a higher freight. Thus plaintiff of NSC's tinplates was due to the inherent nature or
was able to ship high grade cargo at a lower character of the goods and not due to contact with
freight rate. seawater.

(i) As regards defendant's "III

counterclaim, the contract of voyage charter
The trial court erred in finding that the
hire under paragraph 4 thereof, fixed the
stevedores hired by NSC were negligent in the
freight at P30.00 per metric ton payable to
unloading of NSC's shipment.
defendant carrier upon presentation of the
bill of lading within fifteen (15) days. Plaintiff "IV
has not paid the total freight due of The trial court erred in exempting VSI from
P75,000.00 despite demands. The evidence liability on the ground of force majeure.
also showed that the plaintiff was required
and bound under paragraph 7 of the same "V
Voyage Charter Hire contract to pay The trial court erred in finding that NSC
demurrage of P8,000.00 per day of delay in violated the contract of voyage charter hire.
the unloading of the cargoes. The delay
"VI
amounted to eleven (11) days thereby making
plaintiff liable to pay defendant for The trial court erred in ordering NSC to pay
demurrage in the amount of P88,000.00. freight, demurrage and attorney's fees, to VSI." 4

Appealing the RTC decision to the Court of Appeals, NSC As earlier stated, the Court of Appeals modified the
alleged six errors: decision of the trial court by reducing the demurrage from
"I P88,000.00 to P44,000.00 and deleting the award of attorneys
fees and expenses of litigation. NSC and VSI filed separate
The trial court erred in finding that the MV
motions for reconsideration. In a Resolution 5 dated October
'VLASONS I' was seaworthy, properly manned,
20, 1993, the appellate court denied both motions. Undaunted,

Page 11 of 24
NSC and VSI filed their respective petitions for review before 3. Whether or not NSC's cargo of tinplates did sweat
this Court. On motion of VSI, the Court ordered on February during the voyage and, hence, rusted on their
14, 1994 the consolidation of these petitions. 6 own; and

4. Whether or not NSC's stevedores were negligent

The Issues
and caused the wetting[/]rusting of NSC's
tinplates."
In its petition 7 and memorandum, 8 NSC raises the
following questions of law and fact: In its separate petition, 9 VSI submits for the
consideration of this Court the following alleged errors of the
Questions of Law
CA:
"1. Whether or not a charterer of a vessel is liable for
"A. The respondent Court of Appeals
demurrage due to cargo unloading delays
committed an error of law in reducing the award of
caused by weather interruption;
demurrage from P88,000.00 to P44,000.00.
2. Whether or not the alleged 'seaworthiness
B. The respondent Court of Appeals
certificates' (Exhibits '3', '4', '5', '6', '7', '8', '9',
committed an error of law in deleting the award of
'11' and '12') were admissible in evidence and
P10,000 for attorney's fees and expenses of
constituted evidence of the vessel's
litigation."
seaworthiness at the beginning of the
voyages; and Amplifying the foregoing, VSI raises the following issues
in its memorandum: 10
3. Whether or not a charterer's failure to insure its
cargo exempts the shipowner from liability "I. Whether or not the provisions of the
for cargo damage." Civil Code of the Philippines on common carriers
pursuant to which there exist[s] a presumption of
Questions of Fact
negligence against the common carrier in case of
"1. Whether or not the vessel was seaworthy and loss or damage to the cargo are applicable to a
cargo-worthy; private carrier.

2. Whether or not vessel's officers and crew were II. Whether or not the terms and conditions
negligent in handling and caring for NSC's of the Contract of Voyage Charter Hire, including
cargo; the Nanyozai Charter, are valid and binding on
both contracting parties."

Page 12 of 24
 The foregoing issues raised by the parties will be "Generally, private carriage is undertaken by special agreement
discussed under the following headings: and the carrier does not hold himself out to carry goods for the
general public. The most typical, although not the only form of
1. Questions of Fact
private carriage, is the charter party, a maritime contract by
2. Effect of NSC's Failure to Insure the Cargo which the charterer, a party other than the shipowner, obtains
3. Admissibility of Certificates Proving the use and service of all or some part of a ship for a period of
Seaworthiness time or a voyage or voyages." 12

4. Demurrage and Attorney's Fees. In the instant case, it is undisputed that VSI did not offer
its services to the general public. As found by the Regional Trial
The Court's Ruling Court, it carried passengers or goods only for those it chose
under a "special contract of charter party." 13 As correctly
The Court affirms the assailed Decision of the Court of concluded by the Court of Appeals, the MV Vlasons I "was not a
Appeals, except in respect of the demurrage. common but a private carrier." 14 Consequently, the rights and
obligations of VSI and NSC, including their respective liability
Preliminary Matter  :  Common Carrier or Private Carrier  ? for damage to the cargo, are determined primarily by
stipulations in their contract of private carriage or charter
At the outset, it is essential to establish whether VSI
party. 15 Recently, in Valenzuela Hardwood and Industrial Supply,
contracted with NSC as a common carrier or as a private
Inc. vs. Court of Appeals and Seven Brothers Shipping
carrier. The resolution of this preliminary question determines
Corporation, 16 the Court ruled:
the law, standard of diligence and burden of proof applicable
to the present case. ". . . in a contract of private carriage, the
parties may freely stipulate their duties and
Article 1732 of the Civil Code defines a common carrier obligations which perforce would be binding on
as "persons, corporations, firms or associations engaged in the them. Unlike in a contract involving a common
business of carrying or transporting passengers or goods or carrier, private carriage does not involve the
both, by land, water, or air, for compensation, offering their general public. Hence, the stringent provisions of
services to the public." It has been held that the true test of a the Civil Code on common carriers protecting the
common carrier is the carriage of passengers or goods, general public cannot justifiably be applied to a
provided it has space, for all who opt to avail themselves of its ship transporting commercial goods as a private
transportation service for a fee. 11 A carrier which does not carrier. Consequently, the public policy embodied
qualify under the above test is deemed a private carrier. therein is not contravened by stipulations in a

Page 13 of 24
 charter party that lessen or remove the protection This view finds further support in the Code of
given by law in contracts involving common Commerce which pertinently provides:
carriers." 17
"Art. 361. Merchandise shall be transported
at the risk and venture of the shipper, if the contrary
Extent of VSI's Responsibility and
has not been expressly stipulated.
Liability Over NSC's Cargo
Therefore, the damage and impairment
It is clear from the parties' Contract of Voyage Charter suffered by the goods during the transportation,
Hire, dated July 17, 1974, that VSI "shall not be responsible for due to fortuitous event, force majeure, or the
losses except on proven willful negligence of the officers of the nature and inherent defect of the things, shall be
vessel." The NANYOZAI Charter Party, which was incorporated for the account and risk of the shipper.
in the parties' contract of transportation further provided that The burden of proof of these accidents is on
the shipowner shall not be liable for loss of or damage to the the carrier."
cargo arising or resulting from unseaworthiness, unless the
"Art. 362. The carrier, however, shall be
same was caused by its lack of due diligence to make the liable for damages arising from the cause
vessel seaworthy or to ensure that the same was "properly mentioned in the preceding article if proofs against
manned, equipped and supplied," and to "make the holds and him show that they occurred on account of his
all other parts of the vessel in which cargo [was] carried, fit and negligence or his omission to take the precautions
safe for its reception, carriage and preservation." 18 The usually adopted by careful persons, unless the
NANYOZAI Charter Party also provided that "[o]wners shall not shipper committed fraud in the bill of lading,
be responsible for split, chafing and/or any damage unless making him to believe that the goods were of a
caused by the negligence or default of the master or crew." 19 class or quality different from what they really
were."
Burden of Proof 
Because the MV Vlasons I  was a private carrier, the
shipowner's obligations are governed by the foregoing
In view of the aforementioned contractual stipulations,
provisions of the Code of Commerce and not by the Civil
NSC must prove that the damage to its shipment was caused
Code which, as a general rule, places the prima
by VSI's willful negligence or failure to exercise due diligence in
facie presumption of negligence on a common carrier. It is a
making MV Vlasons I seaworthy and fit for holding, carrying and
hornbook doctrine that:
safekeeping the cargo. Ineluctably, the burden of proof was
placed on NSC by the parties' agreement.

Page 14 of 24
 "In an action against a private carrier for Where the action is based on the
loss of, or injury to, cargo, the burden is on the shipowner's warranty of seaworthiness, the burden
plaintiff to prove that the carrier was negligent or of proving a breach thereof and that such breach
unseaworthy, and the fact that the goods were lost was the proximate cause of the damage rests on
or damaged while in the carrier's custody does not plaintiff, and proof that the goods were lost or
put the burden of proof on the carrier. damaged while in the carrier's possession does not
cast on it the burden of proving seaworthiness. . . .
Since . . . a private carrier is not an insurer
Where the contract of carriage exempts the carrier
but undertakes only to exercise due care in the
from liability for unseaworthiness not discoverable
protection of the goods committed to its care, the
by due diligence, the carrier has the preliminary
burden of proving negligence or a breach of that
burden of proving the exercise of due diligence to
duty rests on plaintiff and proof of loss of, or
make the vessel seaworthy." 20
damage to, cargo while in the carrier's possession
does not cast on it the burden of proving proper In the instant case, the Court of Appeals correctly found
care and diligence on its part or that the loss that NSC "has not taken the correct position in relation to the
occurred from an excepted cause in the contract or question of who has the burden of proof. Thus, in its brief (pp.
bill of lading. However, in discharging the burden of 10-11), after citing Clause 10 and Clause 12 of the NANYOZAI
proof, plaintiff is entitled to the benefit of the Charter Party (incidentally plaintiff-appellant's [NSC's]
presumptions and inferences by which the law aids interpretation of Clause 12 is not even correct), it argues that 'a
the bailor in an action against a bailee, and since
careful examination of the evidence will show that VSI
the carrier is in a better position to know the cause
miserably failed to comply with any of these obligations' as if
of the loss and that it was not one involving its
defendant-appellee [VSI] had the burden of proof." 21
liability, the law requires that it come forward with
the information available to it, and its failure to do
First Issue  :  Questions of Fact
so warrants an inference or presumption of its
liability. However, such inferences and Based on the foregoing, the determination of the
presumptions, while they may affect the burden of following factual questions is manifestly relevant: (1) whether
coming forward with evidence, do not alter the
VSI exercised due diligence in making MV Vlasons I  seaworthy
burden of proof which remains on plaintiff, and,
for the intended purpose under the charter party; (2) whether
where the carrier comes forward with evidence
the damage to the cargo should be attributed to the willful
explaining the loss or damage, the burden of going
negligence of the officers and crew of the vessel or of the
forward with the evidence is again on plaintiff.
stevedores hired by NSC; and (3) whether the rusting of the
Page 15 of 24
tinplates was caused by its own "sweat" or by contact with seaworthy. We find no reason to modify or reverse this finding
seawater.  LibLex of both the trial and the appellate courts.

These questions of fact were threshed out and decided

Who Were Negligent  :
by the trial court, which had the firsthand opportunity to hear
the parties' conflicting claims and to carefully weigh their Seamen or Stevedores?
respective evidence. The findings of the trial court were
As noted earlier, the NSC had the burden of proving
subsequently affirmed by the Court of Appeals. Where the
that the damage to the cargo was caused by the negligence of
factual findings of both the trial court and the Court of Appeals
the officers and the crew of MV Vlasons I  in making their vessel
coincide, the same are binding on this Court. 22 We stress that,
seaworthy and fit for the carriage of tinplates. NSC failed to
subject to some exceptional instances, 23 only questions of law
discharge this burden.
— not questions of fact — may be raised before this Court in a
Before us, NSC relies heavily on its claim that MV
petition for review under Rule 45 of the Rules of Court. After a
Vlasons I  had used an old and torn tarpaulin or canvas to cover
thorough review of the case at bar, we find no reason to
the hatches through which the cargo was loaded into the cargo
disturb the lower courts' factual findings, as indeed NSC has
hold of the ship. It faults the Court 26 of Appeals for failing to
not successfully proven the application of any of the aforecited
consider such claim as an "uncontroverted fact and denies
exceptions.
that MV Vlasons I  "was equipped with new canvas covers in
Was MV Vlasons I Seaworthy? tandem with the old ones as indicated in the Marine
Protest . . ." 27 We disagree.
In any event, the records reveal that VSI exercised due
The records sufficiently support VSI's contention that
diligence to make the ship seaworthy and fit for the carriage of
the ship used the old tarpaulin, only in addition to the new one
NSC's cargo of steel and tinplates. This is shown by the fact
used primarily to make the ship's hatches watertight. The
that it was drydocked and harbored by the Philippine Coast
foregoing are clear from the marine protest of the master of
Guard before it proceeded to Iligan City for its voyage to Manila
the MV Vlasons I, Antonio C. Dumlao, and the deposition of the
under the contract of voyage charter hire. 24 The vessel's
ship's boatswain, Jose Pascua. The salient portions of said
voyage from Iligan to Manila was the vessel's  first voyage after
marine protest read:
drydocking. The Philippine Coast Guard Station in Cebu cleared
it as seaworthy, fitted and equipped; it met all requirements for ". . . That the M/V "VLASONS I" departed
Iligan City on or about 0730 hours of August 8,
trading as cargo vessel. 25 The Court of Appeals itself sustained
1974, loaded with approximately 2,487.9 tons of
the conclusion of the trial court that MV Vlasons I  was
steel plates and tin plates consigned to National
Page 16 of 24
 Steel Corporation; that before departure, the vessel q And will you describe how the canvas cover was
was rigged, fully equipped and cleared by the secured on the hatch opening?
authorities; that on or about August 9, 1974, while
WITNESS
in the vicinity of the western part of Negros and
Panay, we encountered very rough seas and strong a It was placed flat on top of the hatch cover, with a
winds and Manila office was advised by telegram of little canvas flowing over the sides and we
the adverse weather conditions encountered; that place[d] a flat bar over the canvas on the side
in the morning of August 10, 1974, the weather of the hatches and then we place[d] a stopper
condition changed to worse and strong winds and so that the canvas could not be removed.
big waves continued pounding the vessel at her
ATTY. DEL ROSARIO
port side causing sea water to overflow on deck
and hatch (sic) covers and which caused the first q And will you tell us the size of the hatch opening?
layer of the canvass covering to give way while the The length and the width of the hatch
new canvass covering still holding on; opening.

That the weather condition improved when a Forty-five feet by thirty-five feet, sir.
we reached Dumali Point protected by Mindoro;
xxx xxx xxx
that we re-secured the canvass covering back to
position; that in the afternoon of August 10, 1974, q How was the canvas supported in the middle of the
while entering Maricaban Passage, we were again hatch opening?
exposed to moderate seas and heavy rains; that a There is a hatch board.
while approaching Fortune Island, we encountered
again rough seas, strong winds and big waves ATTY. DEL ROSARIO

which caused the same canvass to give way and q What is the hatch board made of?
leaving the new canvass holding on;
a It is made of wood, with a handle.
xxx xxx xxx" 28
q And aside from the hatch board, is there any other
And the relevant portions of Jose Pascua's deposition material there to cover the hatch?
are as follows:
a There is a beam supporting the hatch board.
"q What is the purpose of the canvas cover?
q What is this beam made of?
a So that the cargo would not be soaked with water.
a It is made of steel, sir.

Page 17 of 24
 q Is the beam that was placed in the hatch opening holds remained waterproof. As aptly stated by the Court of
covering the whole hatch opening? Appeals, ". . . we find no reason not to sustain the conclusion of

a  No, sir.
the lower court based on overwhelming evidence, that the MV
'VLASONS I' was seaworthy when it undertook the voyage on
q How many hatch beams were there placed across
August 8, 1974 carrying on board thereof plaintiff-appellant's
the opening?
shipment of 1,677 skids of tinplates and 92 packages of hot
a There are five beams in one hatch opening. rolled sheets or a total of 1,769 packages from NSC's pier in
Iligan City arriving safely at North Harbor, Port Area, Manila, on
ATTY. DEL ROSARIO
August 12, 1974; . . ." 30
q And on top of the beams you said there is a hatch
Indeed, NSC failed to discharge its burden to show
board. How many pieces of wood are put on
negligence on the part of the officers and the crew of MV
top?
Vlasons I,  On the contrary, the records reveal that it was the
a Plenty, sir, because there are several pieces on top stevedores of NSC who were negligent in unloading the cargo
of the hatch beam.
from the ship.  cdasia

q And is there a space between the hatch boards? The stevedores employed only a tent-like material to
a There is none, sir. cover the hatches when strong rains occasioned by a passing
typhoon disrupted the loading of the cargo. This tent-like
q They are tight together?
covering, however, was clearly inadequate for keeping rain and
a Yes, sir. seawater away from the hatches of the ship. Vicente
q How tight? Angliongto, an officer of VSI, testified thus:

"ATTY. ZAMORA:
a Very tight, sir.
Q Now, during your testimony on November 5, 1979,
q Now, on top of the hatch boards, according to you,
you stated on August 14 you went on board
is the canvas cover. How many canvas covers?
the vessel upon notice from the National
a Two, sir." 29 Steel Corporation in order to conduct the

That due diligence was exercised by the officers and the inspection of the cargo. During the course of
the investigation, did you chance to see the
crew of the MV Vlasons I  was further demonstrated by the fact
discharging operation?
that, despite encountering rough weather twice, the new
tarpaulin did not give way and the ship's hatches and cargo WITNESS:
Page 18 of 24
A Yes, sir, upon my arrival at the vessel, I saw some constructed at the opening of the hatches to
of the tinplates already discharged on the protect the cargo from the rain. Now, will you
pier but majority of the tinplates were inside describe [to] the Court the tents constructed.
the hall, all the hatches were opened.
A The tents are just a base of canvas which look like a
Q In connection with these cargoes which were tent of an Indian camp raise[d] high at the
unloaded, where is the place. middle with the whole side separated down
to the hatch, the size of the hatch and it is
A At the Pier.
soaks [sic] at the middle because of those
Q What was used to protect the same from weather? weather and this can be used only to
temporarily protect the cargo from getting
ATTY. LOPEZ:
wet by rains.
 We object, your Honor, this question was already
Q Now, is this procedure adopted by the stevedores of
asked. This particular matter . . . the
covering tents proper?
transcript of stenographic notes shows the
same was covered in the direct examination. A No sir, at the time they were discharging the cargo,
there was a typhoon passing by and the hatch
ATTY. ZAMORA:
tent was not good enough to hold all of it to
 Precisely, your Honor, we would like to go on detail, prevent the water soaking through the canvas
this is the serious part of the testimony. and enter the cargo.

COURT: Q In the course of your inspection, Mr.  Anglingto [sic],

 All right, witness may answer. did you see in fact the water enter and soak into
the canvas and tinplates.
ATTY. LOPEZ:
A Yes, sir, the second time I went there, I saw it.
Q What was used in order to protect the cargo from
the weather? Q As owner of the vessel, did you not advise the
National Steel Corporation [of] the procedure
A A base of canvas was used as cover on top of the adopted by its stevedores in discharging the
tinplates, and tents were built at the opening cargo particularly in this tent covering of the
of the hatches. hatches?
Q You also stated that the hatches were already A Yes, sir, I did the first time I saw it, I called the
opened and that there were tents attention of the stevedores but the
Page 19 of 24
 stevedores did not mind at all, so, I called the Such negligence according to the trial court is
attention of the representative of the evident in the stevedores hired by [NSC], not
National Steel but nothing was done, just the closing the hatch of MV 'VLASONS I' when rains
same. Finally, I wrote a letter to them." 31 occurred during the discharging of the cargo thus
allowing rain water and seawater spray to enter the
NSC attempts to discredit the testimony of Angliongto
hatches and to drift to and fall on the cargo. It was
by questioning his failure to complain immediately about the
proven that the stevedores merely set up
stevedores' negligence on the first day of unloading, pointing
temporary tents or canvas to cover the hatch
out that he wrote his letter to petitioner only seven days
openings when it rained during the unloading
later. 32 The Court is not persuaded. Angliongto's candid operations so that it would be easier for them to
answer in his aforequoted testimony satisfactorily explained resume work after the rains stopped by just
the delay. Seven days lapsed because he first called the removing said tents or canvass. It has also been
attention of the stevedores, then the NSC's representative, shown that on August 20, 1974, VSI President
about the negligent and defective procedure adopted in Vicente Angliongto wrote [NSC] calling attention to
unloading the cargo. This series of actions constitutes a the manner the stevedores hired by [NSC] were
reasonable response in accord with common sense and discharging the cargo on rainy days and the
ordinary human experience. Vicente Angliongto could not be improper closing of the hatches which allowed
blamed for calling the stevedores' attention first and then the continuous heavy rain water to leak through and
NSC's representative on location before formally informing drip to the tinplates' covers and [Vicente
NSC of the negligence he had observed, because he was not Angliongto] also suggesting that due to four (4)
responsible for the stevedores or the unloading operations. In days continuous rains with strong winds that the

fact, he was merely expressing concern for NSC which was hatches be totally closed down and covered with
canvas and the hatch tents lowered. (Exh '13'). This
ultimately responsible for the stevedores it had hired and the
letter was received by [NSC] on 22 August 1974
performance of their task to unload the cargo.
while discharging operations were still going on
We see no reason to reverse the trial and the appellate (Exhibit '13-A') " 33
courts' findings and conclusions on this point, viz:
The fact that NSC actually accepted and proceeded to
"In the THIRD assigned error, [NSC] claims remove the cargo from the ship during unfavorable weather
that the trial court erred in finding that the will not make VSI liable for any damage caused thereby. In
stevedores hired by NSC were negligent in the passing, it may be noted that the NSC may seek
unloading of NSC's shipment. We do not think so.
indemnification, subject to the laws on prescription, from the

Page 20 of 24
stevedoring company at fault in the discharge operations. "A. Clearly, therefore, NSC's failure to insure the cargo will not
stevedore company engaged in discharging cargo . . . has the affect its right, as owner and real party in interest, to file an
duty to load the cargo . . . in a prudent manner, and it is liable action against VSI for damages caused by the latter's willful
for injury to, or loss of, cargo caused by its negligence . . . and negligence. We do not find anything in the charter party that
where the officers and members and crew of the vessel do would make the liability of VSI for damage to the cargo
nothing and have no responsibility in the discharge of cargo by contingent on or affected in any manner by NSC's obtaining an
stevedores . . . the vessel is not liable for loss of, or damage to, insurance over the cargo.
the cargo caused by the negligence of the stevedores . . ." 34 as
in the instant case. Third Issue  :  Admissibility of Certificates Proving Seaworthiness

Do Tinplates  "Sweat"? NSC's contention that MV Vlasons I  was not seaworthy is

anchored on the alleged inadmissibility of the certificates of
The trial court relied on the testimony of Vicente seaworthiness offered in evidence by VSI. The said certificates
Angliongto in finding that " . . . tinplates 'sweat' by themselves include the following:
when packed even without being in contact with water from
1. Certificate of Inspection of the Philippine Coast
outside especially when the weather is bad or
Guard at Cebu
raining . . ." 35 The Court of Appeals affirmed the trial court's
finding. 2. Certificate of Inspection from the Philippine
Coast Guard
A discussion of this issue appears inconsequential and
unnecessary. As previously discussed, the damage to the 3. International Load Line Certificate from the
tinplates was occasioned not by airborne moisture but by Philippine Coast Guard
contact with rain and seawater which the stevedores 4. Coastwise License from the Board of
negligently allowed to seep in during the unloading. Transportation

Second Issue  :  Effect of NSC's Failure to Insure the Cargo 5. Certificate of Approval for Conversion issued by
the Bureau of Customs 36
The obligation of NSC to insure the cargo stipulated in
NSC argues that the certificates are hearsay for not
the Contract of Voyage Charter Hire is totally separate and
having been presented in accordance with the Rules of Court.
distinct from the contractual or statutory responsibility that
It points out that Exhibits 3, 4 and 11 allegedly are "not written
may be incurred by VSI for damage to the cargo caused by the
records or acts of public officers"; while Exhibits 5, 6, 7, 8, 9, 11
willful negligence of the officers and the crew of MV Vlasons I  .
Page 21 of 24
and 12 are not "evidenced by official publications or certified At any rate, it should be stressed that NSC has the
true copies" as required by Sections 25 and 26, Rule 132, of burden of proving that MV Vlasons I  was not seaworthy. As
the Rules of Court. 37 observed earlier, the vessel was a private carrier and, as such,
it did not have the obligation of a common carrier to show that
After a careful examination of these exhibits, the Court
it was seaworthy. Indeed, NSC glaringly failed to discharge its
rules that Exhibits 3, 4, 5, 6, 7, 8, 9 and 12 are inadmissible, for
duty of proving the willful negligence of VSI in making the ship
they have not been properly offered as evidence. Exhibits 3
seaworthy resulting in damage to its cargo. Assailing the
and 4 are certificates issued by private parties, but they have
genuineness of the certificate of seaworthiness is not sufficient
not been proven by one who saw the writing executed, or by
proof that the vessel was not seaworthy.
evidence of the genuineness of the handwriting of the maker,
or by a subscribing witness. Exhibits 5, 6, 7, 8, 9, and 12 are
Fourth Issue  :  Demurrage and Attorney's Fees
photocopies, but their admission under the best evidence rule
have not been demonstrated. The contract of voyage charter hire provides inter alia:
We find, however, that Exhibit 11 is admissible under a "xxx xxx xxx
well-settled exception to the hearsay rule per Section 44 of
2. Cargo : Full cargo of steel products of not
Rule 130 of the Rules of Court, which provides that "(e)ntries in
less than 2,500 MT, 10% more or less at Master's
official records made in the performance of a duty by a public
option.
officer of the Philippines, or by a person in the performance of
a duty specially enjoined by law, are  prima facie evidence of the xxx xxx xxx
facts therein stated." 38 Exhibit 11 is an original certificate of 6. Loading/Discharging Rate : 750 tons per
the Philippine Coast Guard in Cebu issued by Lieutenant Junior WWDSHINC.
Grade Noli C. Flores to the effect that "the vessel 'VLASONS I',
7. Demurrage/Dispatch : P8,000.00/P4,000.00
was drydocked . . . and PCG Inspectors were sent on board for
per day." 39
inspection . . . After completion of drydocking and duly
inspected by PCG Inspectors, the vessel 'VLASONS I', a cargo The Court defined demurrage in its strict sense as the
vessel, is in seaworthy condition, meets all requirements, fitted compensation provided for in the contract of affreightment for
and equipped for trading as a cargo vessel was cleared by the the detention of the vessel beyond the laytime or that period
Philippine Coast Guard and sailed for Cebu Port on July 10, of time agreed on for loading and unloading of cargo. 40 It is
1974." (sic) NSC's Claim, therefore, is obviously misleading and given to compensate the shipowner for the nonuse of the
erroneous. vessel. On the other hand, the following is well-settled:

Page 22 of 24
 "Laytime runs according to the particular VSI assigns as error of law the Court of Appeals' deletion
clause of the charter party. . . If laytime is of the award of attorney's fees. We disagree. While VSI was
expressed in 'running days,' this means days when compelled to litigate to protect its rights, such fact by itself will
the ship would be run continuously, and holidays not justify an award of attorney's fees under Article 2208 of
are not excepted. A qualification of 'weather the Civil Code when" . . . no sufficient showing of bad faith
permitting' excepts only those days when bad would be reflected in a party's persistence in a case other than
weather reasonably prevents the work
an erroneous conviction of the righteousness of his
contemplated." 41
cause . . ." 44Moreover, attorney's fees may not be awarded to
In this case, the contract of voyage charter hire provided a party for the reason alone that the judgment rendered was
for a four-day laytime; it also qualified laytime as WWDSHINC favorable to the latter, as this is tantamount to imposing a
or weather working days Sundays and holidays included. 42 The premium on one's right to litigate or seek judicial redress of
running of laytime was thus made subject to the weather, and legitimate grievances. 45
would cease to run in the event unfavorable weather
interfered with the unloading of cargo. 43 Consequently, NSC Epilogue
may not be held liable for demurrage as the four-day laytime
At bottom, this appeal really hinges on a factual issue:
allowed it did not lapse, having been tolled by unfavorable
when, how and who caused the damage to the cargo? Ranged
weather condition in view of the WWDSHINC qualification
against NSC are two formidable truths. First, both lower courts
agreed upon by the parties. Clearly, it was error for the trial
found that such damage was brought about during the
court and the Court of Appeals to have found and affirmed
unloading process when rain and seawater seeped through the
respectively that NSC incurred eleven days of delay in
cargo due to the fault or negligence of the stevedores
unloading the cargo. The trial court arrived at this erroneous
employed by it. Basic is the rule that factual findings of the trial
finding by subtracting from the twelve days, specifically August
court, when affirmed by the Court of Appeals, are binding on
13, 1974 to August 24, 1974, the only day of unloading
the Supreme Court. Although there are settled exceptions, NSC
unhampered by unfavorable weather or rain which was August
has not satisfactorily shown that this case is one of them.
22, 1974. Based on our previous discussion, such finding is a
Second, the agreement between the parties — the Contract of
reversible error. As mentioned, the respondent appellate court
Voyage Charter Hire — placed the burden of proof for such
also erred in ruling that NSC was liable to VSI for demurrage,
loss or damage upon the shipper, not upon the shipowner.
even if it reduced the amount by half.  LibLex

Such stipulation, while disadvantageous to NSC, is valid

Attorney's Fees because the parties entered into a contract of private charter,
not one of common carriage. Basic too is the doctrine that
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courts cannot relieve a party from the effects of a private
contract freely entered into, on the ground that it is allegedly
one-sided or unfair to the plaintiff. The charter party is a
normal commercial contract and its stipulations are agreed
upon in consideration of many factors, not the least of which is
the transport price which is determined not only by the actual
costs but also by the risks and burdens assumed by the
shipper in regard to possible loss or damage to the cargo. In
recognition of such factors, the parties even stipulated that the
shipper should insure the cargo to protect itself from the risks
it undertook under the charter party. That NSC failed or
neglected to protect itself with such insurance should not
adversely affect VSI, which had nothing to do with such failure
or neglect.

WHEREFORE, premises considered, the instant

consolidated petitions are hereby DENIED. The questioned
Decision of the Court of Appeals is AFFIRMED with the
MODIFICATION that the demurrage awarded to VSI is deleted.
No pronouncement as to costs.

SO ORDERED.

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